RPT-Fitch Assigns Pakuwon's Notes Final 'B+' Rating

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June 30 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has assigned PT Pakuwon
Jati Tbk's (Pakuwon, B+/Stable) USD168m 7.125% senior unsecured notes due 2019 a
final 'B+' rating, with a Recovery Rating of 'RR4'. The new notes are issued by
Pakuwon Prima Pte Ltd and guaranteed by Pakuwon and certain subsidiaries.
The notes are rated at the same level as Pakuwon's senior unsecured debt rating
as they represent direct, unconditional, unsecured and unsubordinated
obligations of the company. The rating action follows the receipt of documents
conforming to information already received. The final rating is in line with the
expected rating assigned on 19 June 2014.

KEY RATING DRIVERS

Support from Investment Property Portfolio: Pakuwon is a diversified real
estate developer based in Indonesia. The company's property portfolio includes
retail, residential, commercial and hospitality developments. Its ratings
reflect its solid investment properties, which contributed 48% of total revenue
in 2013. Furthermore, 42% of the revenue was derived from its shopping mall and
office leasing operations which have a long-term lease profile.

These investment properties generated solid recurring EBITDA of IDR778bn
(USD67m) and recurring EBITDA/interest coverage of 3.8x, which along with the
company's strong liquidity position will help it manage any cyclicality and
volatility of property development.

Quality Assets: The company's investment portfolio is spread across four well
established and strategically located prime locations in Jakarta and Surabaya.
The main projects comprise of mixed use high rise developments (apartments,
office, retail, and sometimes hotel). Pakuwon's malls, while providing stable
recurring revenue, anchor each of its land banks in Jakarta and Surabaya,
thereby attracting residents and office tenants while servicing as focal points
for local communities. The company has a strong track record of managing its
lease retail occupancy, and consistently achieves above industry average
occupancy.

Higher Margin than Peers: Fitch expects Pakuwon to generate EBITDA margin above
50% in the medium term, supported by a low cost land bank and the company's
ability to create value in its superblocks. Pakuwon posted EBITDA margin of 56%
in 2013 (2012: 55.6%), higher than other rated developers such as PT Alam
Sutera Realty Tbk (B+/Stable) with 42% and PT Lippo Karawaci Tbk
(BB-/Stable) with 27%. Fitch believes that such a high margin will provide some pricing
flexibility during a downturn in the property cycle.

Limited Scale and Diversification: Pakuwon's rating is constrained by its
limited scale and project diversification. Fitch expects the company to generate
most of its cash flows from its current established super blocks in the medium
term. Based on the current rate of development, the company's land bank of 394
hectares would be sufficient for more than 10 years of development. Although the
company will launch a new residential project in West Surabaya in 2H2014, Fitch
notes that its projects and cash flows are less diversified than higher rated
peers.

RATING SENSITIVITIES

Positive rating action is not anticipated in the medium-term given the company's
limited scale, projects, and cash flow diversification.